WTI Crude Dips Over 5% as U.S., Iran Near Hormuz Strait Deal

According to U.S. senior officials, the U.S. and Iran are nearing an agreement to reopen the Hormuz Strait on May 25, with WTI crude falling over 5% in early trading. Risk appetite rebounded as markets grew optimistic about restoring oil transport flows, driving the U.S. Dollar lower and equity index futures higher. The S&P 500 futures climbed, approaching last Friday's near-record close, while currencies sensitive to risk sentiment—Australian dollar and South African rand—led gains against the greenback.

Both sides remain in talks over key language, with final approval potentially requiring several days. Iran's state-affiliated Tasnim News Agency warned the draft could collapse over U.S. resistance on critical clauses, including Tehran's demand to unfreeze its assets. IG analyst Tony Sycamore told clients that despite breakup risks, markets currently favor the bullish narrative on the talks.